Australian opportunity: Plant-based and better-for-you alternatives centre stage in Woolworths-backed FMCG accelerator

15-Aug-2023 - Last updated on 15-Aug-2023 at 03:55 GMT

Plant-based, better-for-you alternatives and functional snacks dominate its current accelerator cohort © Seedlab Australia

Plant-based, better-for-you alternatives, and functional snacks dominate the latest accelerator cohort in Australia led by a Woolworths-backed accelerator.

Nine out of 15 businesses in the plant-based, better-for-you alternatives, and functional snacks space feature in the latest batch of firms identified by Seedlab Australia.

Seedlab’s founder Dr Hazel MacTavish-West said products included Lupini beans and Kakadu plum, as well as functional snacks such as nutrient-dense protein balls.

Founded in 2020, Seedlab takes the incubator approach of offering access to industry networks and expertise, instead of offering capital in exchange for equity.

It focuses on getting them shelf ready, as opposed to ploughing in funding, through Seedlab’s connection with retailer Woolworths. The businesses are given the opportunity to pitch directly to Woolworths’ buying team.

Woolworths initially invested A$4 million (US$2.7 million) in Seedlab to identify emerging businesses in high growth categories such as artisan foods, health and wellness and sustainable products.

These businesses come from either Australia or New Zealand.

Seedlab also partners with food industry leaders from Australia, New Zealand, and the UK – some of whom include Chobani yoghurts and Ashgrove cheese – to be part of its training and support programmes to build the capacity of these businesses.

It also has a network of marketing, accounting, and finance expertise to help companies once they expand beyond the initial founding team.

Dr MacTavish-West, who has 30 years of experience in food science and agri-food, explained why these connections were key for these businesses to scale up:

“I realised from my industry experience that start-ups need access to the information from trusted sources, like how to pitch themselves, position their products to compete with bigger brands, and getting their business protocols in place to grow in the longer-term.

“We tend to work with businesses who grow organically. The founders are sometimes couples or families that may not know what to do with a million dollars. So, throwing money at them isn’t what they need.”

The businesses are guided over at least four months to optimise their operations and perfect their pitch to Woolworths. The accelerator programme could be extended to up to six to 12 months.

Dr MacTavish-West explained how its programme would solve some of the common challenges faced by the businesses:

“Most of these businesses start developing the products in their kitchens, instead of food factories. And they tend to use very expensive ingredients to produce high-quality products.

“The challenge is helping them understand their cost of goods, and making it economically feasible for consumers such as working out best pack sizes and shelf-life extensions.

“The biggest challenge is competing with big players for a share of shelf space. The big guys have big marketing budgets so they can produce at scale and cut down costs. We see how to help these small businesses to add more value to their products and communicate their marketing proposition clearer.”

Dr MacTavish-West also highlighted the need for these small and local businesses to keep abreast of trends such as clean labelling, low packaging, and the impact of food miles’ when they expand.